russian president vladimir putin signs a order banning americans from adopting russian children and denies the children for a chance to live in america and the love of parents. and a slap in the face of

president obama. and remember when there was a reset button to signify resetting and establishing the relationship between the two countries and the president whispered that he would have more flexibility in his second term. what happened? now, mr. putin bans american adoptions because america has criticized russia's cuban rights, oh, dear. the senate is in session, and the house will return late sunday and top lawmakers meet today at the white house. they've had months to reach a deal and still, there has been no deal and there's no negotiatable plan on the table. their failure to do their jobs, that's my opinion. if it was you or me we'd likely be fired by now. rick newman from u.s. world and news report is here. look, i've had it up to here with this. i think our viewers do, too, share this outrage? >> yeah, i think i'll have a meeting whether i'll do my job or not. stuart: really? >> a lot of people have not been

paying attention until recently. this is affecting the real economy and we're going to absolutely see it affect the stock market. stuart: but nothing happens. look. >> and get everybody's attention. stuart: every media outlet, right, middle of the road expressing outrage. what is hang? >> worth taking a step back and people seeing this developing for a long time didn't have high expectations much would get accomplish. this is a lame duck session of congress, a new congress in january and a lot of people said, you know, maybe there's a 50% chance they'll actually get some kind of deal done before the deadline. stuart: that's not good enough. >> they pushed the deadline off. there's always that last second option. let's extend the deadline for another month, two months, three months, and that could very well happen. stuart: let's dig deeper here, i think this is a crisis of the american political system. i'm not pointing fingers of blame on the right or the left.

i'm not doing that. i'm saying the system is a problem. i don't think you can get elected to office today if you say i'm going to cut this entitlement or restrict that entitlement or restrict or cut that payout to some group or people. i think that's the kiss of death in american politics and therein lies the problem. >> that's going to change, these things need to be done. that's simple math. stuart: what will it take to make us change? >> it's going to take main. pain. a lot of people say it's a man made crisis only because we haven't dealt with the problems youp until now. congress set the deadlines. these could be random and asked around. if we start to see, i mean, we've seen this before, stuart and you know, the summer of 2011 we saw this, fall of 2008 we saw this, took a 5 to 7% drop in the stock market, a big abrupt plunge to get attention in washington and that's when we got action. so you can look in the future

and a number of things like that that could happen that would force washington to do something, but we're not there yet. stuart: no, we're not there yet. as you suggest we could roll everything over, agree to keep disagreeing with the current system in flux, but that only delays the 5 to 7% stock market drop or a downgrade from a ratings agency or a bond market-- >> i'm not sure. that might actually trigger downgrading from the agencies which many people think is come almost regardless and going back to the first time it happened in 2011 when standard & poor's did it cited political digs function a--dysfunction the main reason y did that. and that's what we're seeing all over again and everybody who knows the details will tell you this is not a unsolvable problem. there are solutions laid out all over the place in washington, stacked high on shelves, it's a problem of politicians. getting together to actually solve the problem. so we can do this, it's the government that's the problem, not the economy and not even--

stuart: they're suppose today work for us. look, here is what i think is going to happen. i think that we will get some kind of last minute deal, which raises taxes on people who are successful, making serious money. forget about any spending cuts, i don't think that's going to happen and they make promises, but they're not actually going to do it and they'll simply ignore the debt. i think that's what's going to happen. do you agree? >> i'll take that bet. i don't think that's going to happen. i don't think that republicans will agree to any tax increases without spending cuts. i think they've been clear about that. stuart: we go over the cliff. >> they're not going to cave. i think they're going to extend the deed line and see credit downgrade. and i think we're going to fight about this through 2013 unfortunately. stuart: and as if falling off the fiscal cliff isn't enough to push us off another recession, it could of course. tomorrow at midnight a longshoremen's strike could shut

down ports at east coast and the gulf. and the strike could disrupt about, we figure, 2 million tons of imported cargo per day and of course, it would cost the economy billions. it could have major implications on nearly all levels of the u.s. economy, could push america into recession, that's a big could. and president obama, lawmakers meet 3 p.m. on the fiscal cliff at the white house today. markets are going to be watching that real close, but of course, the markets close about an hour after the meeting starts. so, that meeting probably won't have much impact on the markets themselves unless there are leaks about what might happen. until then, any developments out of d.c. i'v i have are going to drive this market. we're calling it sound bite trading. we're covering it. the opening bell is next.

want to know what i did in the last five hours? i played a round of golf. then i read a book while teaching myself how to play guitar; ran ten miles while knitting myself a sweater; jumped out of a plane. finally, i became a ping pong master while recording my debut album. how you ask? with 5-hour ergy. i get hours of energy now -- no crash later. wait to sethe next five hours. just a few seconds from the opening bell, there are no government reports in the news background today. all we've got is a 3 p.m. meeting at the white house between the top two democrats and the top two republicans and the president. yes, the fiscal cliff is the news background to today's trading. hopes of any kind of deal really are slipping away. i'm not going to say it's not going to happen, but the chances of a deal are slipping away.

that is going to affect the early trading today. dow jones industrial average has opened lower, it's going to go down roughly 60 points. if you look at the futures market as a indicator for the current market we should be down about 60 by the time we open up. and barnes & noble, a big mover today and i want to go to lauren, how far up or down. >> it's up 2.3%, stuart. i went over to the booth where it trades, the traders say really heavy volume for in time of morning in the premarket on the stocks. barnes & noble very smart today. the good news up 11% and making a educational investment and putting 90 million into the nook media, which is kind of part of barnes & noble's business, but then put out the bad news, barnes & noble and their holiday sales will come in below expectations and their nook business would not meet their prior production for the full

year, 2013. so they're smart over there. >> it's interesting up 11% on the good news, up only 2% when the bad news comes in. >> minutes later. >> there we are now. thanks very much indeed. we've got it right, the futures pre he dicted a 60, 70% drop. we're down 71, 76 points this friday morning, close to dropping below 13,000 and we have the declining gas prices over, sorry, at least over for now. the price of gas up 2% overnight according to triple-a. it's up 4 cents in a week. new york highest gas price in the continental u.s. 3.72. hawaii always a bit higher than that. wyoming cheapest today 3.01, missouri just a tad above wyoming as of right now. here is the price of oil, we're roughly $91 rah barre a barrel e decline in gas prices has come to an end. oil is back iito the $90 range.

i'm going to bring in rich edison, he's in d.c. rich, i've got two questions for you about the fiscal cliff and the meetings today in the weekend. number one, who is meeting today? that's the first question. who is meeting and where, go. >> top democrat, top republican in the house and senate meeting with the president and vice-president, the white house at three o'clock. stuart: okay, that's three o'clock. the market closes at 4 so we're not likely to get results from the meeting to affect today's stock market trading. i think we've got that. moving into the weekend, what's planned? >> well, what's planned is the house comes back into session on sunday afternoon and take a vote on sunday night. we have no idea what they're going to vote on much like what the senate is doing. the senate has been back in washington for the past couple of days and working on entirely unrelated proposals other than what you're talking about the with fiscal cliff. if there is no movement and have no bill or agreement out of the white house meeting today or shortly thereafter there's not anything for anything for the lawmakers to do this weekend at

least as relates to the fiscal cliff. stuart: i'll be interested to see what happens on the market comes monday morning, if there's nothing coming out this weekend. rich edison right on it, thanks very much indeed. >> thanks. stuart: and everybody, you're going to be angry at the next story. on christmas and hanukkahs, many youngsters and teenagers went on twitter to complain about their presents. i'm going to give awe couple of examples, john said i wish i had some filthy rich he will tifs. relatives, my presents sucked. forgive the language. she said all i got was gift cards, my sucks at giiing presents. crystal, the worst, i hate my white iphone. i just wanted to have a black one. oh. complaining about getting a iphone just because it's a color that's wrong? that's disgraceful. joining us now miriam walllock, mother of six, the kids, that is would never complain about a

gift, would they? >> well, listen, my kids are not angels, they are kids, but i think there are a lot of fastets to the story, to be explored and my first reaction, what a hutspa. the audacity of a child to think they have the right to speak that way, to speak to a adult that way. to take something out. i mean, we have to give kids the appropriate forum to speak their minds, but there is a limit. stuart: okay. so chutzpa. the definition a man who murdered and father and pleads for leniency on the ground that he's a orphan, i think that's the definition. >> i think there are lots of definitions of chutzpa, in this case there's no murder. stuart: i think there is a example of commercialism, materialism run riot in our society, do you? >> i think it's also a example of kids looking at the way that adults express themselves through social networking,

whether it's tweet ago and facebook, sharing information that should be private and appropriately shared instead blasted in front of the world. britney spears breaks up with his husband and announces a divorce through a text and we all know about it. and breath an bethany frankel ts tworsindivorcing her house, noto i know the care, but we look at the way that kids and adults express themselves and there are barriers. we need to educate kids, this is not the way, but this is a tmi moment. too much information. stuart: i'm not feeling much outrage. >> this is two days later. i couldn't believe it. this is where the word chutzpa comes from. we have a lot of time to talk about what it says about society. stuart: this is a wealthy society. >> absolutely. stuart: it showers material

goods on to its children during the holidays and i think we've gone far too far, way too far. >> absolutely. and we need to manage our kids' expectations. because of the society we live in they say this is what is come to go m--coming to me, this is m worth. >> before the holiday starts let's talk about what you think you're getting and where i am as a parent. we have to keep life in moderation, might way, anybody write thank you cards? a response to kids who don't know how to say thank you and don't appreciate what they have. the holidays are not just for saying thank you, it's for year round exploration of how thankful we need to be as people. >> magic words, kids who do not appreciate what they have. >> absolutely. stuart: are we getting a little old, i certainly am, you are not. wasn't it the same in our day, my day, for example, two generations ago? >> it's generational. it's not-- i shouldn't say that it's a

generational issue every single generation. we have to learn to give gifts and receive gifts appropriately and everyone faces the challenge every generation. that doesn't mean we remove gift giving, we reexamine, slow down and learn to do it appropriately to teach our kids of giving gifts. stuart: you have six kids. >> and work, this is fun. stuart: we educate kids. >> no, i've brought interns icht may i ask a question. >> sure. stuart: did you sit your six kids down before hanukkah and say look-- >> i have conversations with my kids about the following theory, which is everyone doesn't get the same. they get what they need and that's a ongoing motto in my home. because i don't want somebody to think because x gets something y is getting it also not the way we work. everyone gets what they need not what they think they deserve and ooh my kids know that certain nights on hanukkah or for

certain things they're not getting everything they quote unphoto want. stuart: that same advice holds across the financial spectrum from the very rich to the very poor. >> why not? stuart: you're not going to get necessarily what you want, but you're going to get maybe what you need. very good. >> it's not mine, i'm quoting mick jagger, but that's okay. the stones you can't always get what you, but if you try sometimes you might find what you need. stuart: okay. do you know that mick jagger had the same tutor and same college as me. >> i did not. stuart: i've got to tell you. miriam we're out of time, but what a way to end it. appreciate it. new at ten the latest read on the housing market right at the top of the hour we get pending home sales for november. what happens to housing, by the way, if we go over the fiscal cliff? could it kill the one bright spot in the economy? we're on all of the stories and it will be at the top of this coming hour. barnes & noble, that news we told you about, a few minutes

ago is affecting apple. i don't know why or how, but it is so lauren, explain it. >> hey, stuart, well, it's in the education department. apple has been making a significant investment in getting their regular size and now, mini i-pads and schools now with this and investment, barnes & noble, and apple is under pressure and they're down 1/2 a percent. what's astonishing, if you look at apple. i know you don't like charts, but if you look at apple we started at 585, look at that, we're all the way down at about 513 right now and the nasdaq, where apple is a big part, is the only major average that's down in the month of december as well. but hold on, stuart. you, my friend, had a tutor in college? >> well, no, it's a different thing. in a british university you have what's called a tutor, that's a professor or a lecturer, who you meet with privately, once every two or three weeks to discuss anything you want to discuss. and i had the same guy as mick

jagger. >> thanks for clearing that up. i was worried. stuart: tutor, different thing entirely. good stuff indeed, thank you, lauren. time is money, let's get on with it, 30 seconds worth of whatever we're watching. how is it for irony, 160 of china's richest people are also its most prominent communists, we'll discuss that with a expert. and you've got a few days to make the charitable contributions to save on your taxes. will at that deduction ever be taken away or trimmed a little. if it does, what happens to charities? we'll tell you. we'll talk to a gun store owner who says he's seen unprecedented increase in sales and why customers are buying and what they're buying. all right, it's friday morning, off to seven early movers for you. today the biggest winners and losers in the nasdaq 100 or the year this is. start with the biggest losers all big names that you know, intel, amazing, down 16% this year, today it's down a little more. staples on the year, down 20%.

today, it's down a little more. and dell down 31% this calendar year and today it's down a little bit more. and yesterday, the big losers, down more. winners, computer hardware maker sea gate, it's down just a fraction right now. data networking company doubled this year up 101% and it's down 79 cents today. that's it, not much. expedia, again, up 107% this year, it, too, is down a fraction as of this morning and we have the biotech company regeneron up 204% this year, it was a $55 stock this time last year, today it's 166. it is though down a buck 80. winners, losers all of them down just a tad today. the dow is down 64. if we go over the fiscal cliff, what does it mean for you,

income tax, estate tax, dividend tax, big changeses, yes, they are coming. can you protect yourself from the government? probably not, but we'll detail what's going to happen to you next. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.

a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis sympto. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily ysical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic. you and your doctor should balance the benets with theisks. all prescription nsaids, like celebrex, ibuprofen, naproxen, and meloxicam have the same cardiovascular warning. they all may increase the chance of heart attack or stroke, which can lead to ath. this chance increases if you have heart disease risk factors suh as high blood pressure or when nsaids are taken for long periods. nsaids, including celebrex, increase the chance of serious skin or allergic reactions

or stomach a intestine problems, such as bleeding and cers, which can occur without warning and may cause death. patients also taking aspirin and the eldey are at incrsed risk for stoch bleeding and ulcers. do not take celebrex if you've had an asthma attack, hives, or other allergies to aspirin, nsas or sulfonamides. get help rightway if you have swelng of the face or throat, or trouble breathing. tell your doctor your medical history d find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion.

stuart: in the absence of the likelihood of a fiscal cliff deal the dow is down 88 points sitting right at 13,000. we're tired of talking about the negotiations and the political in-fighting on the fiscal cliff issue. we want to know what happens to our money if we go flat-out over it. which seems likely. joining us is a certified financial planner and he's got the numbers for us.

go through this one at a time. go flat out, a cliff dive, what happens to the income taxes i pay? >> number one on income taxes, six brackets,10%, 35%. now five brackets, 15% to 39.%. everybody to currently pays federal income tax will come january pay more. >> pay more tax absolutely. stuart: next one, estate taxes. >> probably one of most unfair taxes there are, but estate taxes are going up. currently 35%, going up as high as 55%, but that's not the only problem. you have exemption amounts that in 2012 were 5 million dollars a person. portability meant that you could have portable, if your spouse died 10 million exemption, going to 1 million dollar exemption, no portability. stuart: hold on now, that's

draconian. >> absolutely. stuart: a married couple, one of-- a spouse dies. they've got a estate of 2 million dollars, for example. >> correct. stuart: is estate tax due on payable on the one passed away spouse. >> estate tax is not due until the second death. >> okay. stuart: in. >> in the case of a 2 million dollar estate a simple will where everything gets the husband's, she doesn't get get the exemption. >> she pays up to 55 on 1 million and over. >> january the 1st if we go over the cliff. >> that's federal estate tax and we haven't talked about state. stuart: you're killing me. all right. dividend tax what happens? >> dividend tax are going to go from 15%, what they currently are to ordinary income rates, depending on the tax brackets you're in you could pay as high as 39.6 in dividend tax, so you

have a dividend on a particular stock or whatever, and you're in a high bracket, you could pay more than double than you're paying now. stuart: you're killing me. capital gains taxes. >> this is a beauty. currently short-term capital gains taxed at ordinary income, but long-term capital gains anything over one year is currently 15%. going to 20%. so on every single situation, increased taxes. stuart: income tacks, estate taxes, capital gains taxes and yes, payroll taxes we haven't mentioned, all of them, all of them going up. >> absolutely. stuart: i want to summarize if you pay federal income tax you're going to pay more, if you work you're going to pay more. >> 1,000%, the average american is going to pay about a $3,000 a year. stuart: thank you very much, sir. gold reports, are are we this friday morning.

when everything else is falling to pieces where are we, we're down 3 bucks as of now this friday morning. the n.r.a.'s wayne laperriere says put armed guards in every school. now, hundreds of teachers are getting concealed weapons training in utah. is that a smart move? we'll discuss it. liz macdonald, gerry willis ready to respond next.

200 teachers in utah taking training classes in how to handle a gun. utah is one of a few states that allows guns on school grounds and teachers say they'd like to be able to protect themselves and students. but a gun in school will surely make a lot of people uneasy. gerri willis and elizabeth macdonald are here. it makes me feel uneasy the idea you have a armed teacher in every school. how about you. >> the n.r.a. suggested, we'll have a armed guard in every school and trained in using a weapon. and i think at the end of the day, the more guns you have in schools the more possibility they might be misused. and the kids might steal that's

my worry. stuart: it will be in a locked cupboard accessible only to one-- >> how well do you see things working. >> civilians are less likely to hit the target versus law enforcement and representative ron paul is against all of this. he's saying this is not the answer, this or wellion surveillance totalitarian way to go and total state control he says will be invited into the schools if you're armed teachers. >> ron paul says that. >> representative ron paul is against this. >> use it as a extension of government. >> yeah, he does, i understand the man's point, i'm just surprised to hear this. >> he's vehemently against this. >> not every teacher is so stable, too. i tell you something, i come from a long line of teachers in my family, a lot of stories about teachers. >> send your e-mails-- >> stop it right now, the e-mails are on the way. in a few minutes the latest read on pending home sales for november. and we ask a secondary question,

will falling off the fiscal cliff kill this one bright spot in the economy which is housing why can't congress make a deal? it had months to compromise and there's nothiig out there. the dow is down 88. copd makes it hard to breathe, but with advair, i'm b. so now i can be in the scene. advair is clinically proven to help significantly improve lung function. unlike most copd medications,

advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day. advair won't replace fast-acting inhalers for sudden symptoms and shou not be used more than twice a day. people with copd taking advair may have a higher chance of pneumonia. advair may increase yo risk of osteoporosis and some eye problems. tell your doctor if you have a heart condition or high blood pressure before taking advair. if you're still having difficulty breathing, ask your doctor if including advair could help improve your lung function. get your first fu prescription free and saveon refills at advaircopd.com. >> announcer: you never know when, but thieves can steal your identity and turn your life upside down. >> hi. >> hi. you know, i can save you 15% today if you open up a charge card account with us. >> you just read my mind. >> announcer: just one little piece of information and they can open bogus accounts,

stealing your credit, your money and ruining your reputation. that's why you need lifelock to relentlessly protect what matters most... [beeping...] helping stop crooks before your identity is attacked. and now you can have the most comprehensive identity theft protection available today... lifelock ultimate. so for protection you just can't get anywhere else, get lifelock ultimate. >> i didn't know how serious identity theft was until i lost my credit and eventually i lost my home. >> announcer: credit monitoring is not enough, because it tells you after the fact, sometimes as much as 30 days later. with lifock, as soon as our network spots a threat to your identity, you'll get a proactive risk alert, protecting you before you become a victim. >> identntity theft was a huge, huge problem for me and it's gone away because of lifelock. >> announcer: while no one can stop all identity theft, if criminals do steal your information, lifelock will help fix it, with our $1 mlion service guarantee.

don't wait until you become the next victim. you ha so much to protect and nothing lose when you call lifelock now to get two full months of identity theft protection risk free. that's right, 60 days risk-free. use promo code: gethelp. if you're not completely satisfied, notify lifelock and you won't pay a cent. order now and also get this shredder to keep your documents out of the wrong hands-- a $29 dollar value, free. get protected now. call the number on your screen go to lifelock.com to try lifelock protection risk free for a full 60 days. use promo code: gethelp. plus get this document shredder free-- but only if you act right now. call the number on your screen now!

stuart: moments from now on new at 10:00 the latest read on the housing market just crossing wires now. housing of course has been one of the bright spots in this economy. we will question whether that will change if we go over the fiscal cliff. speaking of the cliff there is no deal, not even a plan. top lawmakers will meet today at the white house but judging from the language issues on both sides, the deal does not look likely. no matter what the outcome, republicans in my opinion will get the blame. check the big board. we are down. in the absence of the plan or a dealer any movement toward such we have the dow down 80 points barely above 13,000. here is the company. liz macdonald is here and gerri willis is here. lauren simonetti on the floor of the new york stock exchange. we just got the numbers. pending home sales in november up 1.7%. that is a pretty solid reading rising to the best level in 2 years, that is vote sale,

pending sales of homes. seems the housing market is still bright spot. gerri: is the bright spot and not going to be the bright spot. we have seen consumer confidenco take a nosedive critical to keeping housing in place and the fiscal plan, if we don't do anything it will hurt housing too..o cf1 o stuart: you think housing could be in trouble because of the weakness of the underlying economy? gerri: consumers are expressing how upset they are. liz: i agree. it could get delayed by the fiscal, tim geithner already warning about that the treasury department. stuart: this is the one bright spot in the economy. housing is a bright spot and you say it goes into reverse, likely goes into reverse. gerri: all about consumers staying home for christmas. stuart: that is the worst economic news you could deliver right now. i think it is.

gerri: let's see how it works out. stuart: i want to play this sound bite from democrat senator harry reid. this is what he said yesterday on the senate floor. >> american people don't understand the house of representatives operating without the house of representatives. it has been operated with a dictatorship of the speaker. stuart: that were dictatorship of the speakers very strong, confrontational language. joining me is the democrat's strategists, welcome back to the program. i am saying using language like that is not conducive to getting a deal or progress when the two sides get together at the white house this afternoon. that is a mistake. i don't think the senator should have said that. >> john boehner is not a dictator. he is being held hostage by members of his caucus who won't let him negotiate. i don't think it's fair to say he is a dictator of any kind. he has been trying to work

something out, even raising taxes on people over $1 million. people of his own caucus won't let him do that. stuart: you are shining appraise -- >> i feel bad for the guy. i have been saying for weeks he lost control of the caucus. stuart: i won't point blamed either side. doesn't look like we have a deal. we are in a real mess and i'm not pointing the blame on either side period. i am saying we have a fundamental problem with america's political system. seems to me all we do is spend money in return for buying votes. what do you say? >> more fundamental than that. there's ssmething called gerrymandering, when you have congressional districts they are not competitive. either party, not being defeated by the opposing party but by primary voters, third they're being killed by people to the right of a man democrats to the left of them. it makes you become more

fundamental and your belief in either side and that is not conducive to any negotiation. >> president obama is the least obstructive president since lbj. he has had dodd-frank and health reform and cash for clunkers and cash for -- the chrysler bailout, what we're seeing now is 13 democrats in the senate are vulnerable if they go along with the tax increases, solid red states and harry reid knows that and harry reid is hostage to his own caucus. >> harry reid pass legislation to raise taxes -- [talking over each other] >> he got them a few months ago in july when he voted to raise taxes -- [talking over each other] >> we are heading into the midterm is. people have short-term memory is. when they see the vote with the fiscal cliff they will say wait a second, those thirteen

democrats -- [talking over each other] >> 13 democrats in the same polling that all people do when they're ready for election and they have seen essentially voters overwhelmingly believe you have to raise taxes on what they consider [talking over each other] [talking over each other] >> that is not so according to the polls and these people are running for reelection. >> suppose we get higher taxes on people making $250,000 a year. i agree that is what is going to happen. that doesn't solve anything. it solves absolutely nothing. this is a spending problem. >> it is a revenue problem aad the spending problem. >> >> we are at pre

[talking over each other] [talking over each other] >> under reagan it was 8.7. stuart: we have a fundamental political problem with our system here. how do we get out of this? will tell you what, a very sharp drop in the stock market, a downgrade of the treasury-or a debt crisis where people stop lending money, we don't want any of those to happen but that is likely to happen. >> we have massive crisis and for a while people were together and -- [talking over each other] stuart: nothing has happened. nothing. >> can't say nothing has happened and obama has accomplished this. [talking over each other] stuart: we are more deeply in debt. >> look at his level of spending. stuart: look at $1 trillion deficit every year the last four

years. >> the budget control act koch $1.5 trillion in spending. stuart: don't you get it? >> over ten year period. [talking over each other] stuart: i insist on this. president obama's plan cuts the deficit, it does not. it restrict future increases in the deficit. it is in the $24 trillion debt in 2015 will only be $20 trillion. [talking over each other] stuart: address the question. [talking over each other] >> let me answer you. we have a fundamental disagreement whether in a situation like this when the economy is of whether the government needs to cut spending. i do not believe it does. you believe it does. we have a fundamental difference how to proceed forward. stuart: what we need more than anything else is to stimulate the private sector and you don't do that with more spending and we need to control long-term entitlement spending. we have to reform entitlement

programs. that would fix things. stuart: i agree with you on a ladder but not the former. stuart: where's the president's reform program? >> that proposed -- absence something the democrats -- [talking over each other] >> you want to get rid of medicare and medicaid? stuart: that is always what you say. that is not true. why did you raise the eligibility age 65 to 67? raise the retirement age 66 to 70? wine means test medicare? why introduce competition among health-care providers within medicare, why not do that? >> would you agree that you are paying more -- stuart: if you get long-term reform, yes. this president has given absolutely no reform plan at all period. >> a few months ago you were yelling at me and the democratic

party about cutting $760 billion [talking over each other] [talking over each other] >> here you say that -- [talking over each other] stuart: when you can laugh all up and down -- [talking over each other] stuart: you don't get it. you don't get it. this president does not get it. last one real fast. >> already stimulus, we have the equivalent of germany and south korea to the debt and still have twenty-three million people unemployed or underemployed. the government is still thinking we are in the dot.com housing bubble. it has not reset itself, that whole area is in bubble territory. stuart: last word, 10 seconds. >> with a fundamental disagreement with an economy like this needs. i don't believe you need to cut spending. stuart: long-term you cut it.

>> long-term yes but not now. stuart: when you cut tax rates to stimulate the private sector and you are not doing it. >> did that under bush. look what happened. the economy got terrible. stuart: when the economy, are you crazy? the economy in the first years of the bush administration went straight up. [talking over each other] stuart: 48 straight months of job gains. [talking over each other] stuart: the final year of the bush administration the deficit was $167 billion. now is 167 -- >> compare the clinton administration with tax rates, much more robust private sector. stuart: can we get america back away and not to be? >> that is -- [talking over each other] stuart: out of time. tax deduction for charitable donations end or restricted. will rich people stop giving or is the government trying to become the go to charity of choice? yes they are. it is on its way with that.

we will discuss it in a moment. i got to keep going. i was out of breath all i stopped. we don't have a commercial break and now we have this. more outrage. russia bans adoptions by americans. not only is vladimir putin denying four russian children the chance of a better life in america but insulting the u.s. and the obama administration. three years ago hillary clinton presented the russian foreign minister with a reset button. how did that relationship work out? who could forget president obama, he would have more flexibility in the second term. what a disaster. liz: latest in a long string of a fronts. door and the being treated as political poker chip and that is an outrage. most children have a better home -- russia has been thumbing its nose at the united states ever

since president obama said i want to essentially reset russian relations. is naive to think you can deal with russia in this way, being accommodating on ballistic missiles and the u.s. agency for international development kicked out by russia. there was another way russia stuck its finger in it side. >> where do you want to live? want to live in russia where poverty rates are soaring according to forbes magazine or do you want to live in the u.s. where you have opportunity, where the economy can expand and obama opportunities for people who live here. is obvious the choice that would be made but the failure is in policy. stuart: we got that settled. time to go to laurin. the dow is down 1 for points. maybe there would listening to the conversation. facebook is down today so what is going on with facebook? >> down 2.5%. there are a lot of issues with facebook. the stock has held on sharply

since the may ipo but the new york post is reporting today that since the instantgramm, the privacy setting drama, might have actually lost 25% of its users. something we keep our eye on. stuart: that is something to look at closely. thank you very much. down 102. one of the 1,000 richest people in china, 60 of them hold key positions in the communist party and the communist government. billions of dollars in wealth sounds like a plutocracy more than anything else. we are on it. it is next.

stuart: barnes and noble says holiday sales were coming in below what was expected and the note will not meet sales projections for the year however the stock is up, because it is investing $89 million. that is hurting apple, this puts pressure on the educational tablet market war and apple is down. late stage trials of the experimental drug for patients undergoing knee surgery didn't meet the goal. shares are down $0.80 and a drugmaker saying it study for its drug to treat a certain type of cancer was accepted by u.s.

health regulators. it is awaiting marketing approval and the stock is up 20%. some of the richest people in china hold key positions in the communist party. a plutocracy? we will have more on that right after this.

stuart: of the 1,000 richest people in china 160 of them hold key positions in the communist party and the communist government. they have a collective net worth, 860 people, $221 billion.

joining us is the heritage foundation, derek, that is the plutocracy and i say it can't last. what say you? >> i think you are right. the party has a choice of dealing with what is now systemic baked in corruption or eventually going to fail, not tomorrow or the next day or short-term problem but a long-term problem that they either have to change or they are going to fall. stuart: 160 people, most of them billionaires', certainly hundreds of millionaires. did they make their money within the government, being corrupt within the government? is that now they got the money? >> this brings up the size of the problem. there are two different groups. there's a group that made their money in the government meaning they have a government position or party position and also a position running a large

state-owned enterprises and there's the group that made their money outside the party and was brought in. the party decided to bring in all the rich people in the country and that has advantages but one of the disadvantages is there is no one to resent except the party. they have a power and the money. stuart: what is the end game? what will be the catalyst for real change? >> the party is going to be backed into a corner, this is not something they can run from. they have to decide not to have another anti-corruption slogan effort. something that matters and take on all these people who made this money and say you can't do this anymore or eventually popular unrest will get worse and worse. there has been a moderate increase in the unrest the last couple years but the situation as you mentioned, the concentration of wealth in the party has gotten worse. unrest is going to get worse. they have to take on this corruption or eventually the party will fall. stuart: what form does this

unrests take? just online postings or is it outside demonstrations? >> there are demonstrations. a huge increase in popular protests. they are not yet violent usually but up to now the party has said look at local corruption, all the local officials. we in beijing on not like that, but all this information coming out slowly filters into china that the richest people, the people who benefit most from the corruption are at the top. you mention 160 with the $220 billion, most of those are national government officials so those local protests that have been contained so far, if the party doesn't address this problem they are going to spread and the national. we are not talking about tomorrow. we're talking a long-term problem the party cannot avoid. stuart: what happens if china cannot maintain its explosive growth rate? it used to grow at 10% or 11% and now is down to 7% growth.

if it fell to 4% or 5%, that could be a catalyst for serious political unrest, couldn't it? >> yes. at 10% growth, a lot of people are getting richer and if some people a superridge that is okay because most of us a doing well. at 7% there are fewer people doing well. at 4% fewer so you get more people saying wait a minute, my life is not getting better and meanwhile that guy in the party is the billionaire. this is intolerable. if they can't hold the growth, it is a payoff to people saying we are corrupt and ridge but you are doing okay. if they can't hold growth the people don't pay off any more and you will get more resentment. stuart: the heritage foundation, a fascinating stuff. please come back and keep us up to date on what could be an explosive situation. thank you. vladimir putin banned americans from adopting russian children. my take on obama's latest

foreign policy failure.

>> this is what is coming to me. this is what i deserve. this is what i alone. who are you? our responsibility is to say before the holidays start let's talk about what you think you are getting and where i am as a

parent. stuart: that was in the last hour, how ungrateful kids use social media to complain about christmas gifts. tune in weekday mornings, we start at 9:20 sharp. we have a drop, 89 points laura, the dow resting at 13,000 as we speak. all retailers, most of them on the eastern seaboard are going to get hurt if the port strike happens first inning sunday morning. home depot could be hurt more than most and the stock is always down. >> home depot is down 1%. talking the past couple months how retailers do 40% of their business in the holiday quarter. the home depot quarter is in the spring when people fix up their homes and this is the time of year they get their inventory in to stock their shelves when people make the investments and

if this strike happens that handles 45% of commerce in the u.s. they could be heard. stuart: it could push poll of america into almost recession territory if it happens and if it is prolonged. thank you very much. the dow is down 90. senator dianne feinstein introduces her proposed assault weapons ban. the gun control debate will be a huge issue in the new year but for gun stores it means sales are spiking even more so than after the elections. dozens of assault rifles are flying off the shelves by the hour. we will talk to a gun store owner with an extraordinary rise in sales at 10:47. today vladimir putin banned americans from adopting russian children. he doesn't like america's criticism of russia's human rights record. here is my take. this is cruel.

thousands of young lives will be spending crude orphanages, thousands of american parents will lose the child they hoped to law as their own. this is a disgrace. america is a very generous country. you are not told this often enough but it is true and it is particularly evident in the adoption process. i don't have the exact number but it is close to a million foreign-born for children adopted into american homes. think of that. all those youngsters who now fraud, think of the generosity of the adopting parents who opened homes and hearts, another race or religion. no where, no other country opens like america, absolutely none. long comes vladimir putin, willing to break hearts to make a political point. what kind of person condemns children to a life of deprivation and denies them the opportunity of love and care? that is exactly what has happened and where is the obama

administration? stuart: told america would show a different face to the world and the world would respond to this new restrained america? remember hillary clinton hitting the reset button with the reset, or the flexibility in a second term? another obama failure. we are not respected, we are just pushed around and now this. generous americans may not extend their love to russian children. that really is simply disgraceful.

stuart: joining us from chicago, tres knippa. president obama meeting with congressional leaders, big deal at 3:00 p.m. today. here we go again. it sounds like trading. you are not going to get many sound bites out before the 3:00 meeting ends and the trading day ends soon after that. do you feel the outrage? >> absolutely. what i am outraged most about is it is a shame we do not have a functioning bond market. our bond market should be in disarray in the politicians in washington right now. our credit should be being downgrade. we are going the wrong direction. there is not one single compromise on the table being

discussed in washington that is positive for the economy, no one knows where a new job comes from. it is from a business owner has profit and wants to expand. tell me what compromise is being discussed? it is putting more money into a business owner's pocket so expand and hire is somebody. it is not happening. stuart: why isn't the bond market tearing the administration to shreds and wire when not being downgraded? keep printing money no matter l what? >> absolutely. in my career there have been three bubble. the first was the nasdaq bubble. we traded at rousing bubble and now we have a global-global government bond market bubble, and will not last and there will be tremendous opportunities when the time is right. this is an abomination. politicians should be getting crucified because of what is happening right now. stuart: i wish we could end on a note of hope and optimism but don't think we are going to.

thanks very much, see you next year. one bright spot in the economy so far is the housing market. pending home sales out at the top of the hour a gain of 1.7%. new home sales up over 4%. joining us is morgan brandon, staff writer at forbes magazine. let's suppose, welcome to the program, you agree that housing is a bright spot? you have some growth and recovery. we go over the fiscal cliff, full scale over that cliff, tax increases and spending cuts. does that for a housing in to reverse? >> i don't think we will see the home price hemorrhageds we saw several years ago but i do think this will create a prolonged bottom. we could see downward pressure on prices. we see tax cuts that will expire as the relief act that are worried about more than the

mortgage interest deduction. you see that -- more people walk away from homes rather and short sale, housing is 40% of sales right now. you see more people walk away, more foreclosures, down pressure on prices. we have some worries. stuart: a very straight answer. what happens if we go over the fiscal cliff? yes, it does. not so dramatically. >> i do think robert schiller was right when he said we could see weakness moving forward. stuart: as in case schiller. he is saying watch out. stuart: he is right to say that. let's say we don't go over the cliff but we get a tax increase on the so-called rich, forget spending cuts and ignore the debt. very small scale deal that focuses on taxing the rich. what happens to housing there? >> great question. we have seen pending home sales and new home sales, what we are seeing is a fire sale.

at the low end wear short sales are concerned and the high end where a luxury home sales are we see a lot of sellers incentivizing selling homes before the end of the year so they don't get slammed with taxes. stuart: to sell -- >> in the fourth quarter we will see that get sluggish next year, i also think with all this uncertainty whether we go over the cliff we will see tight lending standards despite a low mortgage interest rate. stuart: isn't that a counterargument? ben bernanke prints money and $45 billion of mortgages every month and breaks down 3.5% or something like that. surely that continues, surely that is a bright spot. >> if that happens and we have the weak dollar we will see foreign buyers coming in to the market. stuart: you mentioned luxury homes. they are selling well, multimillion-dollar homes. you did an rticle on that. >> lots of articles on that.

this housing recovery, i throw the r word out there with caution but what we have seen in housing creates concern, the very low end doing well, distressed properties for first-time home buyers and high end doing well especially with billionaires' who are plowing their money into real estate. stuart: foreigners are buying a lot of this. >> you can -- we have been seeing a lot of argentinian and venezuelans and middle easterners and koreans coming into the market and chinese. stuart: canadians. gerri: this recovery is no hand mirrors. it is not strong and inventories at small levels here, these are professionals in many cases who are buying. at the end of the day any with of negativity, you get something of a deal. won't be helpful because a lot of buyers -- >> i agree with that. if you look at the consumer

confidence numbers that came out earlier this week we will see that for coal over. liz: what works better? the federal reserve keeping rates low? ben bernanke is a republican. also that for the president and the administration and congress's housing program? we have 160. what works better? stuart: neither. >> if you look at housing and what has happened in the last couple years we saw the double dip because the government got involved for the first-time home buyer tax credit. that is the trip to the bottom. i think it doesn't work but i say that given -- this year from the government programs we have seen actually done some good. it has taken five years. stuart: you have destroyed my argument that a single family home is the best investment you can make. >> i still think it is. a long-term investment, looking to buy -- aasolutely not.

stuart: cheapest assett. good stuff. thanks for joining us. come again soon. we are indeed the most generous nation in the world the tax deductions for those donations could come to an end or be restricted. we will deal with that in a moment. ♪ [ indistct shouting ] [ malennouncer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritde. ♪

stuart: president obama meet

with congressional leaders at 3:00 eastern talking fiscal cliff. if we take the plunge over that cliff it needs higher federal income taxes for everyone who currently pays them. look at the dow industrials. in the absence of a plan ordeal on the table the dow is down 83 points. the price of gas, $3.27 is the national average according to aaa, up one cent yesterday. we have seen a halt in a long slide in gas prices. check the price of oil. this is why the price decline is over. $91 a barrel, those gas prices. pending home sales out at the top of the hour, a gain of 1.7% compared to october. coming up, a gun store owner who says household weapons are flying off the shelves. after the shooting in newtown, connecticut sales are way up. he will be on the show next.

stuart: the final week of the year, usually this is a boom town for charities. people make their contributions to save on taxes and they do those contributions right now. there has been talk that a charitable deduction could be eliminated or restricted. our next guest says that would be a terrible idea. the former chairman of the new york faith council on the arts, welcome to the program. good to have you with us. >> how are you today? stuart: pretty good. if you get a restriction on the charitable tax deduction or it

is eliminated i understand charitable contributions would probably o down. i can see that happening but doesn't that imply that the whole reason for giving to charity is to get a tax break as opposed to supporting the good that the charity does? >> that is a misnomer. so many people think we are giving something to the ridge and the wealthy by giving them a tax break. firstly, the charitable sector is $1.9 trillion industry, 5.5% to 6% of our economy, charitable organizations like the salvation army, the red cross, united way,

0.9% of their contributions over $10,000 are financed 15% of their budget -- stuart: i understand charity is big and i understand a tax deduction is an incentive to give to charity. >> look at their services. stuart: i don't see that. should we be -- what i am trying to get at is to get a tax deduction, that detracts from the motives to be charitable. not so much a good thing, thiss is a tax break. you know what i mean? >> it has been this way for over 100 years and it works and i

think giving is god's get and if you get a tax break and you incentivize a sector to help the homeless, to help the poor, to feed the hungry, that is a thing. [talking over each other] stuart: hold on for a second. you say charitable giving is $129 trillion industry. suppose the charitable tax deduction was eliminated completely, what do you think the number will go down to? 1.9 trillion to what? >> i think it will go down more in proportion than the cuts because charitable organizations are very cautious and if they see their revenue go down by 10% they will cut back 20%. stuart: give me a number. it is $1.9 trillion and you eliminate the tax deduction what does it come down to?

$1 trillion or less? give me an idea? >> that will -- be elimination would probably cut it in half. stuart: i am sorry i am out of time, that is a dramatic number. of they don't expect the deduction to be eliminated but cut it in half would be a serious thing. >> it will go down by 30%. stuart: that is important stuff. former ambassador to finland, that is why i address u.s. mr. ambassador. thank you for joining us. this is an important subject. next case, dozens of assault weapons flying off the shelves by the hour at one particular gun dealer. we will bring you the store owner in a moment and ask what is going on? who is buying and why?

stuart: gun sales are soaring. the tragedy in newtown and talking about banning certain guns increasing demand for them. gun stores seeing unprecedented demand. joining us is collier pennington who owns a gun store in texas. as i understand it, did you sell

30 assault rifles in a 1-hour period recently? is that correct? >> we did. however, those guns don't go out the store in that amount of time, there's paperwork involved. that is what we saw last week. stuart: you ever see the man like that before? it is an extraordinary demand. >> unprecedented in my business. demand, we can't get enough product to meet the demand. stuart: i am told this surge in demand is because there are moves afoot to ban this kind of weapon. senator feinstein is going to introduce a comprehensive ban in january. did the man went through as soon as the band was mentioned? >> what you saw after the

tragedy, at christmastime everything happened quick in 15 days, perfect storm if that is what we can call it. stuart: how much is an ar-15? >> they range from $800 to $3,000 depending on the type. stuart: what are people buying for? i can think of self protection, hunting or they like to have that kind of a gun because it is fun to own and shoe? >> it is all three and some are doing it for investment purposes, some punch with them and some use it for self-defense. stuart: have you ever seen anything like this before? am i right in saying your sales this year are double what they were at? >> combined they are. you saw an increase in 2009 but not like this.

stuart: what about handguns? >> those with ten around plus. stuart: how do you feel about selling that kind of weapon? >> i think it is our right to buy them. the government has taken steps to fill out paperwork to own them. not just people walking off of the street without being checked. stuart: we appreciate you being with us. that is important information that is appreciated. almost out of time but we have time for the highlight reel which is next.

>> it's the highlight reel, the outrage wheel. mr. putin banning american adoptions because america criticized the human rights record. >> outrage, regardless of obama, there's opportunity for people who live here. >> all hypedded up here. >> like a political poker chip. you want to live in russia wheee poverty rates are soaring or the

u.s.? it's nay eve to deal with russia this way. >> generous americans may not extend love to russian children. that really is simply disgraceful. it's the outrage edition because it doesn't stop with mr. putin and what he's done to american adoptive parents. there's more, isn't there? >> outraged, but happy new years. politics with orphans and taxes here in the united states. i'm outraged. the thing with the fiscal cliff, this russian thing bothers me. it shows the obama administration, you can want -- cannot set policies between u.s. and russia. >> it's a slap in the face. >> you have to be strong. >> everybody's making mountain out of a mole hill here about the meeting that's going on with the president and congressional leaders over h